In 2001, the aircraft company created a high-profile showdown over its new headquarters. It pitted Dallas against Chicago and Denver.

After Chicago prevailed, Gov. Rick Perry had an epiphany: Texas had to step up its game big-time. “Sometimes in defeat is how you become stronger,” Perry recalled in a local speech in May.

At his urging, lawmakers set aside $285 million for corporate incentives. Texas soon led the nation in attracting projects and has ranked first or second in the eight of the last nine years.

Perry often made the cover of Site Selection magazine. He talked up the state’s business climate on national TV. He became the biggest dealmaker in Texas, arguably in the country.

That Boeing project was largely about prestige. This time, it’s about adding thousands of jobs at a giant manufacturing plant.

The 777X facility seemed destined for Washington state, home to most of Boeing’s production. But after the machinists union refused to trade pensions for a 401(k), Boeing opened the project to bids.

Twenty-two states with 54 sites promptly stepped up. Last week, Boeing began notifying states that had made the short list but did not identify the locations. The company said it would choose a site early next year.

Boeing is unrivaled at the incentive game, both in reaping taxpayer dollars and generating buzz. Most companies prefer to fly under the radar and announce an expansion or relocation after details are finalized.

Holding a public auction brings more scrutiny on executives. And the spotlight drives up the stakes (and price) for state and local governments. If losing Boeing’s headquarters was a game-changer for Texas in 2001, other leaders must feel similar pressure today.

“Boeing’s campaign is pernicious, because it’s so high-profile and feeds more misinformation,” said Greg LeRoy, a critic of corporate incentives. “It suggests that tax breaks matter most when there’s no evidence of that.”

Megadeal mania

LeRoy’s nonprofit group, Good Jobs First, tracks trends in subsidies. Companies are doing far fewer expansions than in the early 2000s, he said, yet they’re getting more big awards.

The number of annual “megadeals,” defined as at least $75 million in public money, has roughly doubled since a decade ago, the group said. And 11 companies had deals that topped the billion-dollar threshold.

Boeing ranked No. 2 in megadeals in a study released last summer. That was before Washington state offered $8.7 billion for the next airplane factory — the one that’s in play now.

Since 2009, Boeing landed more than $1 billion in incentives from South Carolina for the Dreamliner factory, according to Good Jobs First. In 2003, Washington pledged $3.2 billion.

Boeing gets small awards, too. For a repair facility in San Antonio, it received a $10 million tax abatement. Oklahoma gave about two-dozen small-dollar grants and low-cost loans.

In the headquarters battle, Chicago’s incentives lapped the field. City and state put up a reported $63 million, compared with offers in the mid-teens from Dallas and Denver.

But lawmakers in Illinois are tiring of the game. They recently rejected a deal for Archer Daniels Midland and two others. Last week, ADM said it was moving its Decatur, Ill., headquarters — to Chicago.

Priorities questioned

House Speaker Michael Madigan had blasted the appearance of “corporate pay-to-play” schemes and companies looking for “free money.”

The three employers paid little or no corporate income tax, he said, and wanted to cut their collective tax burden by $67 million. To cover that hole, he estimated that more than 45,000 people would have to start paying state income taxes.

“I find it very difficult to support tax giveaways for corporate CEOs and millionaire shareholders,” Madigan said in a statement. “I question our priorities when corporate handouts are demanded by companies that don’t pay their fair share.”

That doesn’t mean Illinois won’t bid for Boeing. The trophy is just too shiny to dismiss.

Missouri’s governor recently called for a truce with Kansas on their “border war.” Since 2009, the two states have given a combined $210 million in incentives, but the Kansas City metro area has no net gains to show for it. About 6,000 jobs merely shifted across the state line in both directions.

“There is no reason another dime of taxpayers’ money should be spent to subsidize the movement of jobs within this region,” Gov. Jay Nixon said.

Boeing is different. A few weeks later, Nixon called a special session to consider subsidies. This month, Missouri offered $1.7 billion in incentives to Boeing, and St. Louis County approved local tax breaks that could double the total value.

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About Mitchell Schnurman

Mitchell Schnurman has been writing about business news in North Texas for more than 25 years and has been a columnist since 2001. He joined The Dallas Morning News in 2012 after working at the Fort Worth Star-Telegram and Dallas Times Herald. He championed the lifting of the Wright Amendment, supported the American Airlines-US Airways merger and often weighs in on tax breaks for developers. Seven times, he’s been named one of the country’s “Best in Business” columnists by the Society of American Business Editors and Writers.